Albania holds off sale of Albpetrol to Vetro

Reuters Staff

2 Min Read

TIRANA, Dec 10 (Reuters) - Albania has held off signing a contract to sell state-owned oil company Albpetrol after would-be buyer Albanian-U.S.-owned Vetro Energy failed to make a deposit to back the sale, an official said on Monday, which could mean the deal is in jeopardy.

Speaking a week after a second deadline to sign a contract expired, Deputy Energy Minister Sokol Dervishaj said Albania would still give Vetro a chance if it made the deposit.

Vetro Energy offered to buy all the shares of Albpetrol for 850 million euros ($1.1 billion), which is equal to 10 percent of Albania’s gross domestic product.

“The contract has not been signed, and the company has not deposited 20 percent of the contract (as a) guarantee,” Dervishaj told reporters.

“Hence, the ministry has started seeking the 10 percent of the company’s tender offer guarantee,” Dervishaj said.

This means that should the talks collapse, Albania wants to claim the cash already deposited, which according to Vetro was at Chicago-based American Chartered Bank.

Dervishaj said any decisions on the future of the deal would be taken by the government along with its advisers, U.S. consulting firm Patton Boggs, but it continued to nurse hopes of a deal.

“If the company will deposit the guarantee worth 20 percent of the contract, we shall have all the necessary flexibility to take it into consideration and give the company the necessary chance to continue the negotiations,” Dervishaj said.

Neither Dervishaj nor Vetro have given any details on why the deal failed to go through. Albania badly needs the money because its public debt will exceed 60 percent of the gross domestic product next year.

Albanian oilman Rezart Taci, who emerged as Vetro’s majority shareholder after hiding his name until the end of the tender, said three weeks ago “the financing arrangements and investment of capital are in place”.